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Guy Pope, manager of the
Columbia Contrarian Core
fund, keeps a color-coded Excel spreadsheet ranking the fund's 69 holdings that is updated daily. The stocks that have the highest appreciation potential are on the top of the list, and those that are closest to their target price are on the bottom. By focusing on that rainbow sheet to determine what and when to sell, Pope keeps himself from getting caught up in the emotions that can derail even the best of investors.

"It's something I've done my whole career, and I can't imagine running a portfolio without it," Pope says. "I take it home with me every night, and go over the price targets."

Pope, 48, a longtime resident of the Pacific Northwest and an avid runner, approaches his $4.6 billion fund (ticker: LCCAX) with the discipline of someone training for a marathon. He sticks to his process, regardless of what the market may be doing.

Pope's stock-picking strategy begins with a screen of stocks, primarily from the Russell 1000 index, that have a market value of $2 billion or more and are trading in the bottom third of their 52-week price range. Recently, that screen turned up 250 stocks. "In good times, that can shrink to 100 names," Pope says. "And when there's a very deep selloff, such as the fourth quarter of 2008, it will get to over 900 names."

Then, Pope and his Portland, Ore.-based team—Harvey Liu, Michael Welter, and Nicholas Smith—start digging into the companies one by one. What they're looking for: stocks hated by others—regardless of whether they're growth or value—that their research has determined will be able to recover. With a concentrated portfolio—the top-10 holdings account for nearly 30% of assets, and the top holding,
Apple AAPL -0.8071535965814671%Apple Inc.U.S.: NasdaqUSD125.35
-1.02-0.8071535965814671%
/Date(1427830371198-0500)/
Volume (Delayed 15m)
:
25474083
P/E Ratio
16.785809906291835Market Cap
736073426681.742
Dividend Yield
1.4993221150011962% Rev. per Employee
2153110More quote details and news »AAPLinYour ValueYour ChangeShort position
(AAPL), for more than 5%—they like to buy and hang on to companies. Turnover is 47%, versus the category's average of 61%, according to Morningstar.

Pope got his bachelor's in political economics at Colorado College before going to Northwestern's Kellogg School of Management for his M.B.A. He joined Columbia in 1993 and stayed for 21 years as the firm morphed from a privately held shop with some $20 billion in assets to a subsidiary of
Ameriprise FinancialAMP 0.4503129293237674%Ameriprise Financial Inc.U.S.: NYSEUSD131.61
0.590.4503129293237674%
/Date(1427830357199-0500)/
Volume (Delayed 15m)
:
505164
P/E Ratio
15.548701221962231Market Cap
23886518555.105
Dividend Yield
1.7633199057535913% Rev. per Employee
978540More quote details and news »AMPinYour ValueYour ChangeShort position
(AMP) with more than $350 billion under management. He has been managing Columbia Contrarian Core since 2005.

"Guy is incredibly regimented in all facets of his life—he eats the same thing for breakfast every day," Liu says. Recalling his move from Singapore to Portland, Liu adds, "Guy knew that I was trying to get back in shape, so he invited me to run with him on one of his favorite trails. I envisioned that we would talk about stocks and the markets, but 10 or 15 minutes into the run, he just took off and left me in the dust."

Pope's discipline and strategy have left his competitors in the dust, too: Columbia Contrarian Core has beaten 98% of its large-blend peers over 10 years, up an average of 10.2% annually, versus the large-blend category average of 7.6%, according to Morningstar. He's also beating 84% of his peers over five years.

Pope's contrarian approach has worked well in both up and down markets. In 2007, when the market was strong and emerging markets were hot, Pope's research led him to high-quality companies. Then, as the bear market began, the names on Pope's screen grew to more than 900, and he started buying financial companies such as
Wells Fargowfc -0.41993792222019355%Wells Fargo & Co.U.S.: NYSEUSD54.54
-0.23-0.41993792222019355%
/Date(1427830370811-0500)/
Volume (Delayed 15m)
:
5604450
P/E Ratio
13.063763608087092Market Cap
281823690666.009
Dividend Yield
2.5641025641025643% Rev. per Employee
340658More quote details and news »wfcinYour ValueYour ChangeShort position
(WFC), and other stocks that had been pummeled—setting up the fund to outperform in 2009. "Going to what's out of favor can help you," says Pope, who has a "significant" amount of his own money in the fund.

Consider
Citigroup
(C), the epitome of an out-of-favor stock and the fund's fourth-largest holding. It has had a number of high-profile troubles this year, from failing its stress test to the discovery of fraud in its Mexican unit. Pope figures that things can only go up: He expects Citigroup to pass its next stress test, and argues that as interest rates move higher, sentiment on financial stocks will improve. Plus, at 0.85 times tangible book value, the shares are a bargain, he says, adding, "Little has gone right for them this year, and the stock is down. I think it is clearly contrarian now, and very intriguing from this valuation level."

Columbia Contrarian Core

Total Returns*

1-Yr

3-Yr

5-Yr

LCCAX

22.28%

16.30%

20.09%

S&P 500

21.91

16.16

19.96

% Of

Top 10 Holdings

Ticker

Portfolio**

Apple

AAPL

5.28%

JPMorgan Chase

JPM

3.43

Verizon Comm.

VZ

2.92

Citigroup

C

2.89

Chevron

CVX

2.53

CVS Caremark

CVS

2.52

Johnson & Johnson

JNJ

2.50

Procter & Gamble

PG

2.49

Philip Morris Intl

PM

2.47

Comcast (Class A)

CMCSA

2.39

Total:

29.42%

*All returns are as of 7/9; three- and five-year returns are annualized. ** As of 05/31. Source: Morningstar

Another stock Pope likes is
Verizon CommunicationsVZ -0.7634364820846905%Verizon Communications Inc.U.S.: NYSEUSD48.745
-0.375-0.7634364820846905%
/Date(1427830370626-0500)/
Volume (Delayed 15m)
:
6302976
P/E Ratio
19.339285714285715Market Cap
204113646499.045
Dividend Yield
4.514209500359085% Rev. per Employee
716746More quote details and news »VZinYour ValueYour ChangeShort position
(VZ), the telecommunications company that recently completed a deal with
Vodafone Groupvod -1.5954244431065623%Vodafone Group PLC ADSU.S.: NasdaqUSD32.69
-0.53-1.5954244431065623%
/Date(1427830370198-0500)/
Volume (Delayed 15m)
:
2150766
P/E Ratio
1.1214940662560455Market Cap
88051392587.1693
Dividend Yield
3.3287656148679234% Rev. per Employee
746251More quote details and news »vodinYour ValueYour ChangeShort position
(VOD). "Vodafone shareholders over time are not natural holders of Verizon stock. We thought that would create some selling pressure on Verizon, and we believe it did," Pope says. The stock is now the fund's third-largest holding. Shares recently traded at 13 times next year's consensus estimates, and sported a dividend yield of 4.3%. "It was a company selling at a discount to the market with a much higher-than-average dividend yield," Pope says. "We think that it will perform well in this slow-growth environment."

He also sees opportunities in biotech as the sector's selloff added a number of once-expensive names to his screen. Pope particularly likes
CelgeneCELG -3.36610564905849%Celgene Corp.U.S.: NasdaqUSD115.98
-4.04-3.36610564905849%
/Date(1427830371198-0500)/
Volume (Delayed 15m)
:
7282732
P/E Ratio
46.32335329341317Market Cap
96086929542.6938
Dividend Yield
N/ARev. per Employee
1271270More quote details and news »CELGinYour ValueYour ChangeShort position
(CELG), recently at about $87, whose flagship product, Revlimid, which fights blood cancers, has been the subject of a patent dispute. "It got swept up in the momentum selloff in the second quarter and the biotech selloff of the second quarter," says Pope, who added to his position in the low $70s. "We feel good about the intellectual property as surrounds Revlimid." Earnings are expected to reach $7.50 per share in 2017, a 25% annualized growth rate—and Pope sees prospects beyond 2017.

His portfolio of household names may not seem all that contrarian at times. "People look at our holdings, and say, 'Hey, there's nothing really contrarian about that name,' but if we buy contrarian stocks and sell them when they're contrarian we wouldn't create alpha," Pope says. "We buy them when they are contrarian and sell them when they are fully valued."

Pope will also use his rainbow sheets to pare names. If a stock falls 15% from its purchase price, he'll cut a third of the holding and gather the team to reassess the name from scratch. In fact, he figures the team spends more time ensuring that the current holdings deserve to stay there than trying to come up with new stocks to buy.

"The thing I like about our process is, it's not too complex," Pope says. One of the biggest keys to success is blocking out the noise and making sure you're buying and selling on your own timetable. As Pope says, "It's a pretty simple, disciplined process, and simple and disciplined is good in this world."